The 1999 Patten report recommended shrinking the size of the force and recruiting more Catholics. But the Audit Office produced an investigation which said almost 20% of RUC staff who left under the redundancy scheme were rehired.

PSNI director of human resources Joe Stewart said: "Without being able to encourage them to leave there was no way of achieving the 30% target (for Catholic officers) that we did achieve. The focus was on getting people out the door."

He told Stormont's Public Accounts Committee the redundancy process caused the loss of more than 800 people at inspector rank and above, presenting an exceptional set of circumstances. "That is recognised by the oversight commissioner, recognised by the (Policing) Board's own consultants on this matter and recognised by the independent adviser Sir Dan Crompton as well," he added.

The Audit Office report described the PSNI policy for recruiting temporary staff as "at one point out of control". It said the way the process had been managed had not always met the high standards of governance and accountability expected of public sector bodies.

The report revealed that more than 1,000 police officers who had left with large pay-offs had been rehired - with more than 250 of them back within three months. It also showed that in 2004, a £44 million contract to employ temporary staff had been awarded to a local company with no competitive tendering process.

About 5,500 RUC officers were paid off under the Patten redundancy scheme - it was thought to be the most generous redundancy package in the world. Under Patten, the RUC was replaced in 2001 by the PSNI as part of measures to attract more Catholic recruits and make the police more representative of Northern Ireland's population.

Mr Stewart recognised sharp political differences over the redundancies, with many unionists adamantly opposed to 50/50 recruitment of Catholics. After the Patten report was accepted by many politicians and the police there was an upsurge in dissident activity, culminating in the killing of two soldiers, a police officer and a prison warder.

Human resources chief Mr Stewart said that threat helped change police plans. "We were looking very much at a civilian police force, a particular vision of Patten, and then circumstances changed when we had the upturn in dissident terrorist activity, which meant that we had to change our focus and different demands were placed on the organisation," he said.